A Delaware bankruptcy court on Friday approved a $150 million loan to help the embattled SemGroup fulfill its promise of business as usual.
SemGroup had requested $250 million, according to a news release. A hearing to consider granting the company the balance is scheduled for Aug. 18.
"Obtaining this interim DIP (debtor-in-possession) financing is an important step forward in our Chapter 11 process," said Terry Ronan, SemGroup acting president. "The additional reassurance it provides to our creditors and employees will be essential in our ability to execute the plan we have created to maximize value for creditors."
DIP financing is arranged for a company while it navigates bankruptcy. A group of banks led by Bank of America will finance the loan, according to SemGroup.
Lance Ignon, a company spokesman, was unable to comment about SemStream, the subsidiary of SemGroup that provides 9,000 customers in northern Gila County with propane.
"We're not commenting on individual operations in the field," he said. The company previously announced plans to sell off assets in the wake of its July 22 bankruptcy filing. Ignon could not say when any sales would begin.
"We're getting a steady and consistent stream of interest from a variety of potential buyers," he said.
Douglas Mann, president of SemStream Arizona Propane, was not available for comment before press time.
SemGroup declared bankruptcy after failed speculation on the oil futures market led to $3.2 billion in losses.
Arizona Corporation Commissioner Kris Mayes has said she wants to schedule a meeting to ask SemStream further details about its bankruptcy, namely why such risky transactions were never disclosed to the commission. Mayes was unavailable for comment before press time.
She has also expressed dissatisfaction at SemStream's indication they would not build a new storage facility in Winslow as promised. A new storage facility could help mitigate the increased costs of propane, Mayes has said.